Birmingham firm offers 'near-prime' mortgages to businesses
Mar 31 2009 by Tom Scotney, Birmingham Post
A Birmingham mortgage firm has started offering ‘near-prime’ mortgages to businesses looking for funding.
Crystal Commercial Funding, a new division of Crystal Mortgages, said it believed the commercial property market was on the turn, and could be a safe foundation for businesses who just missed out on funding from the banks.
Roger Dewsbery, senior underwriter at Crystal Commercial Funding, said: “Crystal has always been in commercial mortgages, but we thought there was a window because these days a business will jump through hurdles to get its money from the bank and then fail for a small reason.
“We have introduced this little window called ‘near prime’. That doesn’t turn them into a sub-prime borrower – we are just pitching it somewhere in the middle.
“There will be an increased level of risk, the level of risk will decide the cost of borrowing but sometimes it can only be a tiny amount. “I’m not criticising the banks, I’m just saying they have got no margin for movement.
“There is every hope now that this new product will help the many businesses caught between maybe not wishing to move their business account from their clearing bank but at the same time not quite able to match up to the bank’s lending requirements. It’s about lack of confidence, there’s been the feeling that commercial properties are going to tumble in value. We think they have reached nearly the bottom.”
A team of ten people, led by a senior management of four are working on Crystal Commercial Funding.
The near-prime mortgages target the financial needs of the small business, considering mortgages from £30,000 to £600,000 with a maximum loan-to-value of 70 per cent.
Repayment can be taken as interest only or capital and interest, with the product open to direct applicants or through brokers and intermediaries. It covers commercial and semi-commercial applications from England, Wales and mainland Scotland.
Mr Dewsbery added: “We are in a unique position as not only are we the sole company providing funding to this area of the market, we are offering a rate that is still highly favourable to the near prime applicant and the product has enough flexibility to meet the best repayment options for the borrower.”
